Sample Business Contracts


Operating and Marketing Plan - WorldSpace Corp.

EXHIBIT F

OPERATING AND MARKETING PLAN

 



 

Annual Operating Plan

 


 


WorldSpace Annual Operating Plan (Expense Budget) 1/3

 

     Contribution Margin      Headcount Expense      Travel &  
Entertainment  
   Facilities      Equipment      Sales & Marketing      Outside Services      Other      Total  
Expenses  
   EBITDA  

011-CEO-OCOB

                                                 

003-CEO-MESSF

                                                 

004-CEO-Chan

                                                 

005-CEO-Eyob

                                                 

006-CEO-STPA

                                                 

017-CEO-CTO

                                                 

029-CEO-Roxe

                                                 

Total CEO

                                                 

002-COO-OCOO

                                                 
   

111-GA-WEUM

                                                 
   

007-FS-OCFO

                                                 

008-FS-HR

                                                 

009-FS-ADMN

                                                 

010-FS-IT

                                                 

011-FS-FINA

                                                 

Total Finance-Admin

                                                 
                    *                              

012-EO-PREN

                                                 

013-EO-ADMN

                                                 

014-EO-ADSD

                                                 

015-EO-GSEN

                                                 

016-EO-BCNO

                                                 

018-EO-ENSO

                                                 

028-EO-AFSP

                                                 

Total E&O

                                                 

019-AC-ADMN

                                                 

020-AC-GLMU

                                                 

021-AC-PROD

                                                 

022-AC-BCRL

                                                 

023-AC-BCSY

                                                 

Total Audio Content

                                                 

024-SM-SAMK

                                                 
   

025-LR-LEGL

                                                 

026-LR-REGL

                                                 

Total Legal and Regulatory

                                                 
   

027-GS-GSU

                                                 

0275-GS-DOD

                                                 

Total GSU

                                                 
   

Total CSO

                                                 

 


* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan (Expense Budget) 2/3

 

     Contribution  
Margin  
   Headcount  
Expense  
   Travel &  
Entertainment  
   Facilities      Equipment      Sales &  
Marketing  
   Outside  
Services  
   Other      Total  
Expenses  
   EBITDA  

101-GA-CHIN

                                                 

201-LR-CHIN

                                                 

301-EO-CHIN

                                                 

601-SM-CHIN

                                                 

Total China

                                                 
   

110-GA-Idi

                                                 

221-FIN-Indi

                                                 

321-EO-Idi

                                                 

621-SM-Idi

                                                 

Total India

                                                 
   

108-GA-Indo

                                                 

208-LR-Indo

                                                 

308-EO-Indo

                                                 

608-SM-Indo

                                                 

Total Indonesia

                       *                         
   

109-GA-Sing

                                                 

209-LR-Sing

                                                 

309-EO-Sing

                                                 

609-SM-Sing

                                                 

Total Singapore

                                                 
   

105-GA-Aust

                                                 

205-LR-Aust

                                                 

305-EO-Aust

                                                 

605-SM-Aust

                                                 

Total Australia

                                                 
   

GA-Others

                                                 

LR-Others

                                                 

EO-Others

                                                 

SM-Others

                                                 

Total Others

                                                 
   

GA-AsiaStar

                                                 

LR-AsiaStar

                                                 

EO-AsiaStar

                                                 

SM-AsiaStar

                                                 

Total AsiaStar

                                                 

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan (Expense Budget) 3/3

 

     Contribution  
Margin  
   Headcount  
Expense  
   Travel &  
Entertainment  
   Facilities      Equipment      Sales &  
Marketing  
   Outside  
Services  
   Other      Total  
Expenses  
   EBITDA  

102-GA-Lond

                                                 

202-LR-Lond

                                                 

302-EO-Lond

602-SM-Lond

                                                 

Total London

                                                 
   

103GA-Duba

                                                 

203-LR-Duba

                                                 

303-EO-Duba

                                                 

603-SM-Duba

                                                 

Total Dubai

                                                 

104-GA-Fran

                                                 

204-LR-Fran

                                                 

304-EO-Fran

                                                 

604-SM-Fran

                                                 

Total France

                                                 

106-GA-Eafr

                       *                         

206-LR-Eafr

                                                 

306-EO-Eafr

                                                 

606-SM-Eafr

                                                 

Total East Africa

                                                 
   

107-GA-Safr

                                                 

207-LR-Safr

                                                 

307-EO-Safr

                                                 

607-SM-Safr

                                                 

Total South Africa

                                                 
   

GA-AfriStar

                                                 

LR-AfriStar

                                                 

EO-AfriStar

                                                 

SM-AfriStar

                                                 

Total AfriStar

                                                 
   

Total

Company

                                                 

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

Comparison of Financial model to Operating Plan

*

Note: There are small differences between the operating plan and financial model due to the different methodologies used.

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

Gross Revenue by Month

*

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

Contribution Margin by Month

*

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

Revenue by Business Line

*

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

Revenue Summary

*

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


WorldSpace Annual Operating Plan

 

*

Proprietary & Confidential

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 


[Logo]

WorldSpace Corporation

Global Marketing Plan

August 2003

 


CONTENTS

 

Vision and Goal

   3

Objectives

   3

Key Initiatives

   3

The Company’s Market Segment

   3

Product Capabilities

   4

Audio

   4

Multimedia

   4

Encryption

   5

Compelling Consumer Content

   5

Product Road Map

   5

Launch of Mobile Service

   5

Product Applications

   8

Target Client Markets

   8

Positioning

   9

Pricing

   10

Distribution and Promotion

   11

Sales & Marketing Budgets

   12

 

i


Vision and Goal

 

WorldSpace Inc. (“WorldSpace” or the “Company”) is a satellite-based, global digital audio and multimedia broadcasting company headquartered in Washington, D.C. Since it’s founding, WorldSpace’s strategic goal has been to become a leading global media company offering a wide range of audio and multimedia services to an audience of unprecedented size. Investing over US$1.2 billion, the Company has established the world’s first satellite-based digital audio and multimedia broadcasting network, with two active satellites (AsiaStar and AfriStar) that cover Asia, Africa, the Middle East and most of Europe. WorldSpace also has one ground spare satellite and another in process. The WorldSpace high power satellites with their digitally formatted transmission capabilities provide listeners with near CD quality sound. Each satellite has three beams, and each beam can currently carry about 50 high quality digital channels.

Objectives

 

  1. Generate “*” in receiver sales in 2003

Ramp up receiver sales to achieve “*” in 2004

 

  2. Generate “*” in enterprise sales (Closed User’ Groups and Capacity Leases) in 2003

Ramp up enterprise sales to achieve “*” on 2004

 

  3. Generate “*” in consumer subscription sales in 2003 Ramp up consumer subscriptions to achieve “*” in 2004

Key Initiatives

 

    Drive orders to a few key receiver manufacturer partners

 

    Leverage manufacturer, content, and distributor partners to build co-marketing plans to implement targeted opportunities

 

    Launch Mobile service

 

    Target, win, and leverage reference enterprise accounts

The Company’s Market Segment

 

WorldSpace is a digital satellite media broadcaster. Two satellites provide audio and multimedia distribution capabilities to Africa, Asia, the Middle East, and Europe. The company produces and distributes its own audio content, partners with brow’ casters to distribute their content, and provides satellite capacity for enterprise clients to prepare and distribute their propriety content. WorldSpace is entrenched in the same market segment as XM and Sirius satellite radio companies, who each license technology from WorldSpace.

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

3


XM, Sirius, and WorldSpace: A Comparison

 

     XM

  Sirius

  WorldSpace

Founded

   1992   1990   1990

Investment Since Inception

   ~US$1,800M*   ~US$1,900M*   ~US$1,200M

Business Concept

   Digital Audio to Auto,
Office & Home
  Digital Audio to Auto,
Office & Home
  Digital Audio & Data to
Auto, Office & Home

Current Target Region

   North America   North America   Asia, Africa, Europe, ME

Subscribers/Customers

   ~201,000   ~15,000   *

Rated

   US$10/month   US$13/month   *

Sub. Acquisition cost (SAC)

   ~ US$130/Sub.   ~US$155/Sub.   *

Present Annual OPEX Burn Rate

   ~ $275M*   ~ US$290M*   *

 

* Estimates drawn from Bear Stearns report on Satellite Radio, June 2002

 

** In India for audio service @*, in Kenya for KIE project @*.

Since WorldSpace provides data or multimedia content delivery in addition to audio programming, it is unique in its comparison to XM and Sirius. For pure data and multimedia delivery services, WorldSpace shares a common market segment with other satellite technology companies such as EuroSat and PanAmSat. Again, WorldSpace is differentiated from other players in the data satellite delivery market because it also broadcasts premium audio content.

Product Capabilities

 

WorldSpace audio and multimedia content distribution to both home/office fixed receivers and mobile receivers.

Audio

 

WorldSpace digital satellite audio broadcasting provides extremely clear reception throughout a vast coverage area. Listeners equipped with a simple receiver (similar to a traditional radio, with the addition of a 4 inch diameter antenna) can tune in to WorldSpace audio broadcasts anywhere in the coverage area.

Multimedia

 

In addition, WorldSpace provides data and multimedia transmission capabilities. Clients can deliver data in many different formats, including web content and slide show presentations, to multiple receiving sites anywhere within the WorldSpace coverage area. To receive data or multimedia content, receiver sites simply need a PC Adaptor, small enough to fit in the palm of a

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

 

4

 

 


hand. The PC Adaptor acts as an antenna, enabling the user to receive digital multimedia content directly to their personal computer.

Encryption

 

Any audio or multimedia delivery can be encrypted, depending on the needs of a client or target audience. The WorldSpace proprietary encryption capability provides secure content delivery through encryption of information through both the uplink and receiving stages. This security mechanism is quite user friendly; clients simply enter a code either directly into their audio receiver or use an allocated a password to unlock encrypted data delivery.

Compelling Consumer Content

 

In addition to the delivery capabilities of the WorldSpace system, the company also produces its own, and partners with other broadcasters to produce their own, radio programming. Boasting top radio talent and best of breed partners, the company broadcasts a variety of global, regional, and local news, information, and music. From international jazz favorites produced by WorldSpace on its “Riff” channel to global news and entertainment provided by National Public Radio, the company provides a diverse range of quality programming to its listening audience.

Product Road Map

 

WorldSpace continues to work with key manufacturing partners to develop receivers that will lead the consumer electronics market into the future. Currently, a wide range of individual, home, and office receivers are marketed. Hardware on the market today ranges from portable, durable individual units specially suited to meet the needs of travelers, military, and harsh rural conditions to boom-box type units with CD, AM, and FM features designed to interest the younger, electronics savvy consumer. Moving into the future, WorldSpace is working with its priority manufacturing partners :o release second and third generation products with newer, more efficient chipsets and enhanced product features and functions.

Launch of Mobile Service

 

Additionally, WorldSpace is working with its core manufacturing and technology partners to enter the mobile, or in-car satellite radio market. XM and Sirius have paved the way, introducing satellite radio as an in-car product in the United States. WorldSpace intends to launch the first ever in-car satellite radio service in Europe, Africa, India, and South East Asia. The company and its partners have implemented an “early-entry” market penetration plan to introduce in-car mobile units beginning in 2003. The company successfully demonstrated mobile in-car satellite radio in 2002 in France, Germany, South Africa, and India. These demonstrations met with widespread success in the investment, press, automobile manufacturer, electronics, and broadcast communities.

Mobile Service Accomplishments to date:

 

    Launched Successful Demonstrations in Paris, Germany, S. Africa, and India—Technology Proven, Alliances secured, Major Press Coverage

 

5


    WorldSpace, Alcatel, Fraunhoffer, ST Microelectronics and XM* are core partners in European venture.

 

    Automobile Manufacturers have expressed a strong interest to link up with venture. PSA, Daimler Chrysler, BMW already involved

 

    WorldSpace assets F3 and F4 make the investment in the satellite infrastructure very attractive (favorably positions WS)

 

    Currently in discussions to buy/absorb Global Radio

 

    Morgan Stanley has already completed a first phase investment banking positioning study to assist in the fund raising.

 

6


*

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

7


Product Applications

 

The WorldSpace audio and multimedia content broadcast capabilities can be applied to numerous market needs. The company is building success on several focused applications of its capabilities: education, health, and entertainment.

Target Client Markets

 

WorldSpace targets its capabilities to focused consumer, government, and enterprise clients around the world. Specifically, WorldSpace is achieving success and building momentum in education, health, and entertainment markets. The following chart outlines key regional markets, a brief assessment of the ICT and media landscapes in those markets, target client categories per region, and the solution marketed to’ these clients.

 

Regions


  

Market Assessment


  

Target Client Categories


  

Solution


Africa   

ICT infrastructure non-existent or expensive

Very few news and entertainment options.

   Private education institutions, Public education ministries, Niche consumer audiences   

Health and Education content delivery.

Targeted subscription content to niche consumers, i.e. expatriate populations.

China   

Inconsistent ICT infrastructure nation-wide

Few news and entertainment options.

   Indirect sales distribution through partnerships: government telecommunications and broadcast agencies   

Health and Education content delivery.

Mobile satellite radio programming to niche consumers.

Europe   

Tech-savvy consumer.

Numerous, large expatriate populations.

   Niche consumer audiences. Travel entertainment providers   

Targeted subscription content to niche consumers, i.e. expatriate populations.

Enterprise sales to in-flight / train travel entertainment providers.

India   

ICT infrastructure expensive. Few ratio news and entertainment options.

Music is valued and personal. Paid subscription entertainment is common and accepted.

  

Private and public education institutions.

Enterprise finance industry. Niche consumer audiences.

  

Health and education content delivery.

Data delivery to finance industry clients.

Targeted subscription content to niche consumers.

South East Asia   

Tech-savvy consumers.

Few news and entertainment options in some locations.

   Niche consumer audiences. Travel entertainment providers.   

Targeted subscription content to niche consumers, i.e. expatriate populations.

Enterprise sales to in-flight / train travel entertainment providers.

In 2003, the company will leverage success achieved in 2002 in both the consumer and enterprise markets. Specifically, the company will utilize the multi-million dollar United States Government contract it won in 2002 as a reference account to speed up the sales cycle of government opportunities currently in the sales pipeline, worldwide. Additionally, the successful launch of

 

8


WorldSpace Global Marketing Plan

 

August 2003

 

of subscription in both India and Europe in 2002 serves as both an internal and external model to continue to penetrate the European and Indian market as well as to launch subscription in Africa, South East Asia, and China

*

Positioning

 

WorldSpace offers the following key differentiators:

 

    Low Cost one to Many Communication

 

    Huge Geographic Coverage/Market Reach

 

    Independent of Costly Terrestrial Infrastructure

 

    Availability of Low Cost Subscriber Units

 

    Mobility

 

    Just in Time Information – Audio and Data (128kb/s)

 

    Quality of sound

 

    Flexible capacity packages for enterprise clients to efficiently purchase only needed resources

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

9


Pricing

 

The WorldSpace pricing schedule is competitive with other communications and media alternatives. Subscription content is available at a low monthly fee, on the basis of an annual purchase. Pricing to enterprise and government clients combines a capacity and per site fee. The pricing is set at a level to allow the company to receive margins on its resources, and simultaneously provide a competitive advantage over other ICT alternatives.

 

10


*

Terms Defined

 

Capacity Price

  

Fee for satellite capacity usage

Service Charge

  

Fee per receiver

CUG

  

Encrypted delivery of client specific content

Capacity Lease

  

Lease of satellite capacity for broadcasters

Multimedia

  

Delivery of data only or data and audio to a computer

Subscription

  

Term used specifically for consumer business

Pricing Guidelines (Applies to all):

 

Account managers may offer strategic discounting of up to 15%. The pricing schedule above is the minimum requirement fro the end user. Any revenue sharing partnerships will necessitate an increase in the above pricing. Contract pricing should be signed for durations of 6 months to 3 years.

Hardware, Installation, Training, and Maintenance are separate and in addition to all pricing.

Distribution and Promotion

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

11


For its entire consumer business, WorldSpace will continue to work with key partners to promote and distribute receivers and subscription packages.

In each market, the company has formed key content, manufacturer, and distributor partners.

Strategic Distribution Alliances

 

Region


  

Partners


  

End Client/Solution


Africa

   Educational institutions, African governments, European and US agencies, NGOs    Business and Government; Consumer Subscription/Mobile

China

  

Government ICT and broadcast partners;

Receiver partners

   Business and Government; Consumer Subscription/Mobile

Europe

   Joint venture with Alcatel Space, others    Consumer Subscription/Mobile

India

   Automobile manufacturers, after-market distributors, consumer electronics distributors, broadcast, infrastructure    Business; Consumer Subscription/ Mobile

South East Asia

   Automobile manufacturers, after market distributors, broadcast, infrastructure    Consumer Subscription/Mobile

In 2003, WorldSpace will build co-marketing plans with each of its partners to target and distribute its products in key markets. The tactics used will vary based on geographic region, target audience, and the partners’ areas of leverage in the market. Marketing distribution and promotion efforts with partners may include:

 

    Direct sales

 

    Events, trade shows and conferences

 

    Inserts in industry publications

 

    On air ads and cross promotions (on WorldSpace and on partners’ terrestrial bands) .

 

    Direct marketing (mail, email)

 

    Press releases, article placement, interviews for ‘expert positioning’

Sales & Marketing Budgets

 

Total Sales and Marketing Expenditures per region (not including head count) as well as line item expenses totaled for the regional offices appear below.

*

 

* Confidential Treatment Requested. The redacted material has been separately filed with the Commission.

 

12


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